Risk Assessment
EigenLayer Risk Assessment
Overview
EigenLayer is a restaking protocol that allows Ethereum stakers to opt-in to securing additional services (AVSs - Actively Validated Services) with their staked ETH. This extends Ethereum’s cryptoeconomic security to new protocols without requiring them to bootstrap their own validator sets.
The protocol enables “restaking” where staked ETH or liquid staking tokens can be used as collateral for multiple services simultaneously, generating additional yield while assuming additional slashing risk.
Smart Contract Risk
Contract Architecture:
- Upgradeable smart contracts with multisig control
- StrategyManager handles deposit/withdrawal logic
- DelegationManager manages operator relationships
- Slasher contract enforces slashing conditions from AVSs
Code Quality:
- Multiple audits from security firms
- Open source codebase
- Active development with frequent updates
- Bug bounty program active
Attack Surface:
- AVSs define their own slashing conditions
- Faulty AVS logic could cause unintended slashing
- Withdrawal credentials held by protocol contracts
- Complex interactions between multiple AVSs
Admin/Governance Risk
Governance Structure:
- Three main governance multisigs
- Operations Multisig for day-to-day management
- Community Multisig for broader decisions
- Executor Multisig for automated execution
Slashing Veto Committee:
- Reputation-based committee (not token-based)
- Can veto slashing decisions from AVSs
- Comprised of Ethereum and EigenLayer community members
- Prevents malicious or erroneous slashing
Trust Assumptions:
- Protocol governed by multisig, not token governance
- Slashing veto introduces trusted committee
- AVS-specific risks delegated to operators
- Early stage governance with planned decentralization
2025 Developments:
- Governance Decentralization Phase 2 in progress
- Incentives Committee managing EIGEN emissions
- Slashing mechanism upgrade (November 2025)
- Transitioning toward DAO governance
Oracle Risk
No External Oracles:
- Protocol does not rely on price oracles
- AVS performance data from validators
- Slashing conditions defined per-AVS
- No oracle manipulation vectors
Economic Risk
Liquidity Risk:
- $12B+ TVL in restaked assets
- Deep liquidity in associated LRT tokens
- Withdrawal delays from underlying staking
- Multiple AVS commitments affect liquidity
Restaking Risks:
- “Not free APY” - additional yield comes with additional risk
- Slashing surface increases with each AVS
- Protocol fees reduce net yield
- Operator selection affects risk profile
Operational History:
- Stage 1 mainnet launched June 2023
- Full mainnet with slashing launched 2024
- Rapid TVL growth to become top protocol
- No major exploits of core contracts
Stage Assessment
Stage 0 Criteria:
- Upgradeable contracts with multisig control
- No meaningful timelock on upgrades
- Trusted slashing veto committee
- Relatively short track record (2 years)
- Complex AVS risk model still maturing
Key Concerns:
- Multisig can upgrade contracts without delay
- Slashing veto committee is trusted, not trustless
- AVS risks are user-delegated but complex
- Governance decentralization still in progress
Justification: EigenLayer is classified as Stage 0 (Fully Assisted) due to its multisig-controlled upgradeability without meaningful timelocks, the trusted slashing veto committee, and relatively early operational history. While the protocol represents innovative technology and has not experienced exploits, users must trust the multisig operators and veto committee. As governance decentralization progresses and timelocks are implemented, the protocol may advance to higher stages.